Shares of Dr. Reddy's Laboratories surged nearly 3% to hit a fresh 52-week high on Thursday after the company received no observation from the United States Food & Drug Administration (USFDA) for its APIs (Active Pharmaceutical Ingredients) facility in Srikakulam, Andhra Pradesh. The U.S. drug regulator conducted pre-approval inspection (PAI) and a routine GMP inspection at Srikakulam facility between July 10, 2023, to July 19, 2023.
“The United States Food & Drug Administration (USFDA) today completed a Pre-Approval Inspection (PAI) and a routine GMP inspection at our API manufacturing facility in Srikakulam, Andhra Pradesh, India (CTO-6),” the Hyderabad-based pharma major says in a BSE filing on July 19.
As the release, the inspection closed with “zero observations” and a classification of no action indicated (NAI).
Boosted by the development, Dr. Reddy's shares gained as much as 2.84% to hit a fresh 52-week high of ₹5,370.20 in intraday trade on the BSE. Earlier today, the pharma stock opened higher for the second straight session at ₹5,226 against the previous closing price of ₹5,221.60 on the BSE.
At the time of reporting, Dr. Reddy's share price was quoting at ₹5,352.50, up 2.5%, with a market capitalisation of ₹89,144 crore. The counter witnessed strong volume as 0.39 lakh shares changed hands over the counter as compared to two-week average of 0.11 lakh stocks.
The pharma heavyweight has risen 34% against its 52-week low of 3,996.10 touched on September 19, 2022. Dr. Reddy's shares have outperformed S&P BSE Healthcare index in terms of returns in the last one year and year-to-date (YTD). The largecap stock has gained 20.6% in a year and 26.5% in the calendar year 2023, compared with 17.8% and 15.9% growth in the BSE Healthcare index during the same period. In the last one month, Dr. Reddy's shares have risen 10% compared to 6.2% growth in the BSE Healthcare index.
Investors kept a close eye on the company's June quarter earnings slated to be released on July 26. The pharma major is expected to report growth in its earnings on the back of strong U.S. sales.
Last week, Dr. Reddy's signed a deal to acquire a 26% stake in special purpose vehicle O2 Renewable Energy IX Private Limited. The company entered into a security subscription and shareholders’ agreement for consumption and supply of renewable energy, with TEQ Green Power XI Private Limited and O2 Power SG Pte Ltd, for investment in O2 Renewable Energy in the ratio of 26:74.
The objective of the deal was to get access to renewable power through solar and wind power plants through (Inter-State Transmission System) ISTS under the captive structure.
In a separate release, the company also informed exchanges that its biologics licence application for its proposed biosimilar rituximab candidate has been accepted for a substantive review by the USFDA. This closely follows acceptance of the rituximab biosimilar dossier for review by two other regulatory agencies -- the European Medicines Agency (EMA) and the U.K.'s Medicines and Healthcare products Regulatory Agency (MHRA). DRL_RI is being developed as a biosimilar of rituximab, a cluster of differentiation 20 (CD20) directed cytolytic antibody. This is approved for various indications including for the treatment of adult patients with rheumatoid arthritis, non-Hodgkin's lymphoma, chronic lymphocytic leukemia, pemphigus vulgaris, granulomatosis with polyangiitis and microscopic polyangiitis.
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